McDonald's Sees Profits in China's Auto Boom; Caterpillar Acquires China's SEM; Ralph Lauren's Partnership Proves Profitable; Labor Dept. Reports Strong Productivity; Sara Lee Delights in Global Profits; Cigna Reports Healthy Fourth-Quarter
McDonald's Corp. (MCD) plans to expand its presence in China by opening 125 new outlets in 2008, The Wall Street Journal reported. Fast food rival, Yum! Brands Inc. (YUM), is far more popular for now, but McDonald's is hoping to gain market share with its drive-through windows, which capitalize on China's status as the fastest-growing global auto market. "In a lot of other countries, drive-throughs start slow ... [but] China has embraced this concept immediately," Tim Fenton, president of McDonald's for Asia, Middle East and Africa, told The Journal.
Caterpillar, Inc. (CAT) has received approval from the Beijing government to complete its acquisition of Shandong SEM Machinery Co., Ltd. Caterpillar, the world's largest manufacturer of construction and mining equipment, first acquired a 40% minority stake in the wheel load producer in 2005. The value of the deal has not been disclosed. The purchase of SEM adds 2,200 to Caterpillar's current 5,000 employees in China.
Net income rose for the fiscal third quarter at popular U.S. clothing and home decorating manufacturer Polo Ralph Lauren Corp. (RL).Income increased 2% due to a combination of lower tax costs and profits from a new partnership with J.C. Penney Co. Inc. (JCP).Net income for the quarter was $112.7 million, or $1.08 per share, up from $110.5 million, or $1.03 per share, for the same period a year prior. The "American Living" partnership with J.C. Penney's is the largest brand rollout in the firm's history and represents the largest deal of its kind between a designer and retailer reported The Wall Street Journal.
Profits for Canada-based Cameco Corp. (CCJ) - the world's largest uranium mining company - jumped 52.5% in the fourth quarter on the back of higher uranium prices. However, the company missed earnings and revenue expectations due largely to its nuclear fuel services division, Reuters reported.
Macy's Inc. (M) said it will eliminate 2,300 jobs and consolidate its three divisions to lower costs, Bloomberg reported. Slowing sales at the second biggest department store in the United States caused the company to lower interest, taxes, depreciation and amortization in 2008 and 2009. Its revised fourth-quarter earnings forecast is $1.57 to $1.62, down from $1.70 to $1.80.
Worker productivity in the U.S. grew more than forecast in the fourth quarter as companies held down labor costs, the Labor Department reported yesterday (Wednesday). Productivity rose an annualized 1.8% after setting a 6% pace in the third quarter. Businesses cut employees' hours at the fastest pace in almost five years in an effort to control expenses as the economy edges towards the first recession since 2001.
Sara Lee Corp. (SLE) said yesterday (Wednesday) that strong international beverage and bakery sales helped the food maker post a $182 million second-quarter profit. The company's revenue climbed nearly 10% to $3.49 billion, the Associated Press reported. Sara Lee predicted 2008 revenue of $13.4 billion, while analysts said they expect revenue closer to $13.22 billion.
Health insurer Cigna Corp. (CI) said fourth-quarter profit rose 13% as double-digit gains in overseas business offset a slight decline in health care earnings. The company also raised its 2008 earnings in anticipation of strong growth in its international and group businesses. Cigna reported a net income of $263 million, or 93 cents per share, compared with $232 million, or 76 cents per share, a year ago. Revenue climbed to $4.46 billion from $4.21 billion a year earlier, the company said in a statement.